A state judge has ruled that Kalshi must stop offering sports bets and other wagers in Washington, citing the company’s lack of licensure and registration in the state. The order, issued recently, requires Kalshi to implement geofencing measures to prevent users in Washington from accessing certain types of wagers.
Kalshi has been ordered to stop offering, accepting, or facilitating wagers on sports, elections, politics, entertainment, culture, tech, and science, among other topics, according to a press release from Washington Attorney General Nick Brown. The company must implement an IP address and residency-based geofence by August 19 and a multi-source geofencing solution by September 2.
The court order stems from Kalshi’s operation of an online betting platform that allows consumers to bet on thousands of topics, which the judge found constitutes unfair and/or deceptive acts or practices in trade or commerce under Washington law. Brown hailed the court ruling, saying that Kalshi has gotten rich promoting wagers on various topics and is now banned from offering wagers on most of those topics in Washington.
Kalshi argues that it is regulated by the US Commodity Futures Trading Commission (CFTC) and therefore does not have to follow state laws. However, the judge found that the US Commodity Exchange Act does not preempt Washington state gambling law. The CFTC has declared a ‘market emergency’ in New York in an attempt to stop the state from enforcing its gambling laws against Kalshi.
The battle between states, the US government, and Kalshi is being litigated in state and federal courts throughout the country. Kalshi is considering all legal options, including asking the Trump administration for help. The company has never offered markets on certain topics, such as wildfires, war, death, or terrorism, due to the potential for perverse incentives.
The ruling marks a significant development in the ongoing debate over the regulation of online betting platforms. As the issue continues to be litigated in courts across the country, it remains to be seen how Kalshi and other similar companies will be affected.
